Think about your life and what you want to accomplish. Have you acquiesced to a life of mediocrity? Or are you busily crafting the perfect life for yourself? It is a choice, after all.
Make the choice to live an extraordinary life. Reject tradition and custom by questioning everything. Always seek improvement. Make a habit of optimization. All easier said than done, right?
Where to start? Don’t accept “that’s the way we have always done it”. Push back. Ask questions. Is this the best way to accomplish something? Has anyone tried to do it differently before?
Challenge traditions and beliefs
Throughout life, there always seems to be a traditional way of doing everything. Most of the time the traditional way is far from optimal. Break free of tradition and think for yourself.
Investing
The financial media wastes so much time and energy distracting you with stories about picking the right stocks or funds. Then they will scare you with tales of financial doom and gloom. Of course once the stock market soars for a while, you’ll start reading articles and hearing talking heads creating a sense of exuberance with all the good news. Financial magazines are full of helpful articles to assist you in your hunt for the mythical ten bagger stock that will finally make you rich.
In the meantime, you’re being led around on a wild goose chase when you should be deploying your assets in a sensible manner. Turn off the television, cancel the finance magazine subscriptions, ignore the pundits. Put your investments in some really boring low cost index funds, check out all your investments with Personal Capital once per month, and be done with it. It’s really as simple as that.
The financial media has to have content to wrap around their advertising, so they talk all day about the best stocks, which way the market is headed, or how the latest current event will undoubtedly cause the next huge bull/bear market. Ignore the noise. Focus on making money long term.
Career
The traditional path to success at work is throwing yourself at your employer’s mercy and working long, hard hours. Stop for a minute and question whether you are getting compensated for all the hard work. Maybe you are. But perhaps your employer is treating you about the same way as your lazy coworkers. Yeah, you might get a 4% raise when they get 3%, or you might get a $2,000 bonus while they get a $1,000 bonus. Is it really worth it to work way more than 40 hours per week for a tiny reward?
Some think it will help them long term or make them immune to layoffs if they are the last one to leave the office every day. Maybe. Or you might get let go anyway. The truth is that you are expendable and today might be your last day with your current employer. Do a good job, but make sure your effort is rewarded. If you aren’t feeling valued, seek somewhere that will reward you for your hard work.
I’m not suggesting that slacking off and surfing on Root of Good all day will make you wealthy long term (although it might!). Just don’t think that being the hardest worker in the office will make you any happier (or necessarily any wealthier) than being the person that comes in, does their job well, and leaves at a reasonable time. Stay balanced. You’ll enjoy life a lot more if you have fun, engaging, and meaningful activities and relationships outside of your job. It’s also good training for early retirement!
Housing
Buy the most house you can afford. Great advice. For suckers. How about “buy the house you need if buying a house makes sense in your area”. It might be cheaper and more convenient to rent. Don’t get sucked into thinking a house is the best investment ever. Investments are investments. Houses are places to live. Buy a place to live in, not an investment. Houses have huge carrying costs like taxes, insurance, maintenance, utilities, and mortgage interest.
House values generally keep up with inflation, and in some areas the values have far outpaced inflation. It’s really a gamble though. Focus on what housing is – a place to live – and buy the house that will provide the best living environment for you. If you plan on being there for a while, don’t focus exclusively on houses that will be appealing to the next buyer. Buy what you want to live in now. If the house is unappealing to buyers, the price should be discounted to reflect it.
In fact, you can save tons of money on housing by buying a rough gem and applying a little polish and TLC to turn it into a beautiful home. Buyers are turned off by strange things like weird paint colors and interesting carpet patterns. Even though both defects can be remedied for under $2,000!
Cars
This is an area where you can really defy expectations. The common perception is that successful people drive really expensive cars. I’m sure there are successful people driving nice cars, but given the abundance of cheap credit and easy lease terms, even broke people without jobs and zero assets can drive nice cars. Lots of wealthy people drive older well maintained cars and get around just fine. These boring, older cars aren’t particularly good at conveying how wealthy you are. Who cares? Drive a decent but older car and spend the money on something you value more (or you could always invest the savings!). Make consumer decisions that lead to actually being wealthy instead of merely trying to appear wealthy to other non-wealthy people. Emulate Warren Buffett. He drives a modest seven year old Cadillac sedan.
There’s also a bias against minivans and Priuses in some circles. They are unmanly. In the case of the Prius, it’s what dirty liberal hippie tree-huggers drive. Minivans and Priuses are really just large lumps of metal with power sources that transport you from point A to point B. If you drive a lot each year, a Prius can save you money on gas while still offering ample internal space for hauling people and stuff. The same goes for a minivan. They are normally less expensive than comparable sized SUVs and often get better gas mileage. If you routinely need to haul a lot of stuff or five or more people, the minivan is probably the best choice for the job.
If you’re a guy, you don’t even have to take a small notch off your man card if you drive a minivan or a Prius, since you’re making a smart choice instead of falling back on thoughtless stereotypes of what you should be driving. If you really need to assert your man-dom you can always put some mud flaps decorated with scantily clad ladies on your efficient transportation choice. Then everyone will know what’s up.
There are obviously legitimate reasons for purchasing expensive and powerful 4×4 SUVs and pick up trucks. For example, you routinely haul large trailers, you’re a landscaper, or you spend lots of time on mountainous dirt roads or trucking across frozen arctic landscapes. Otherwise those vehicles are overkill.
Retirement
Work hard for 40 years and retire at age 65. Throw that rule of thumb in the trash! How about replacing that rule with “save a significant proportion of your income while still living a nice life. Then retire early”. Not everyone enjoys an income high enough to save over half of it. But the vast majority of people can accelerate their savings much more than they already do simply by challenging themselves to ignore the traditional ways of living life and thinking for themselves. Be bold, be different.
Retiring early isn’t for everyone. Maybe you never want to retire, but want to escape from your current stressful nine to five job and do something fun the rest of your life. Go for it! Put together a plan and save enough money to ensure a successful launch into the next phase of your life. Don’t be scared of failure – the worst you can do is go back to your old career and pick up where you left off.
Think Differently
Imagine a world where everyone wanted to conform to the rules and never step foot outside of the box. There are no colors, only black and white and different shades of grey. Pretty boring place, huh?
It’s okay to think differently and revolutionize your life. Think for yourself, slough off the chains of conformity, and make your own path in life.
Why not embark on your journey toward your perfect life right now? Make it the most important thing you do today. Having the perfect life can’t wait until tomorrow!
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Love it. I am on a mission to automate and outsource things that I don’t enjoy or that can be done more efficiently or effectively by someone else and free me up to enjoy my time a bit more. Not sure exactly what will make the cut but it’s going to be a fun ride.
Sounds inspiring. I tend to do everything myself unless there’s free or very cheap automation available.
When I was 30, I realized I did not want to keep being the corporate marketing manager that I was. So I started a marketing consultancy, which did well. But I found that wasn’t what I wanted either. But it was what I knew! Well, never mind!
I took my marketing knowledge, combined it with some newly acquired marine science credentials and founded a marine conservation non-profit. My marketing know-how got the grants. My management experience kept the staff working and the place afloat. And I got to be involved in what I really wanted to do until I retired.
That sounds awesome. Doing what you want to do instead of slaving away in some crap job for 40 years. Living the dream!
@RetiredToWin That is inspirational! Putting your skills into something that is actually meaningful to you is definitely the path to happiness and a fulfilling life. I’ve been on the lookout for another job but then you are waiting for that perfect opportunity to come up which might never happen. Much better to get some money behind you and do something yourself. Write your own story!
@Justin – A great summary on how to live life challenging the social norms! Love it! I never got the the American obsession with big silly cars. I mean we have a few motorheads over here and the boy racer crowd, but on the whole cars tend to be a lot smaller and people are generally less bothered about it. I get the feeling that a lot of Americans think it is their God given right to drive around in a gas guzzling tank of a vehicle, and to say they shouldn’t you are insulting them at a very deep level, and probably being unpatriotic or something as well 🙂
Anyway I’m guessing it’s just an economic thing when it comes down to it… If gas were cheaper over here we’d be exactly the same!
Gas prices were historically one of the big drivers of people choosing large vehicles with poor gas mileage. In recent memory (well, 15 years ago now) gas was around a buck per gallon (16 pence/litre). Then I remember the unthinkable happening – gas broke $2/gallon (32 pence/litre)! People freaked when it broke $4/gallon (though where I live I barely avoided the peak and paid only $3.999 per gallon at the worst). Other higher cost areas with more gas tax broke $5/gallon. Now prices are back to a little over $3/gallon in North Carolina (51 pence/litre). That’s almost 1/3 the price in the UK. No wonder large vehicles are comparatively easy to own here in the states.
Eventually people realized these high gas prices weren’t some crisis but rather a new reality. SUV prices dropped big time and all of a sudden people started looking smart driving sedans and fuel efficient vehicles.
Sorry for the slow reply. That’s good to hear that things are moving in the right direction. And yea people do think with their wallets, although some are clearly better at it than others eh 😉
Well said! These are all areas where the majority of us look at our peers for guidance instead of thinking for ourselves. I especially think about retirement and housing. We are so afraid of the opinions of others that we will work forever and stay in debt just so that we don’t stand out. It makes no sense!
It’s almost like we are trained to live our lives for the sake of others.
I think the “Think Differently” sentiment is one that I wish we could broadcast to the masses somehow. Slowly, but surely!
I’m not sure if the masses are really interested in changing their lives (if it requires any effort).
Contrarian is the word that comes to my mind! I too ‘pimp it out’ in an 8 year old car! 🙂
Nice! Warren Buffett style.
“If you really need to assert your man-dom you can always put some mud flaps decorated with scantily clad ladies on your efficient transportation choice. Then everyone will know what’s up.” That’s really funny. Get some of those mud flaps and then one of those trailer hitch decorations where there are a lovely pair of testicles hanging down on the rear of your vehicle, and you’re set!
Our VP and GM both drive older, higher mile vehicles than what I drive, and my car is almost 9 years old! All that matters when it comes to making money is how much you keep (or are going to get back); not the toys you buy with it.
I’m so glad I started questioning all of this years ago. I’ve always thought the “work 40 years then retire” thing was ridiculous! Now I’m on a path for achievement that will get it done in almost half of that time.
Where I used to work the president (and owner) drove one of the oldest cars in the parking lot. At the time my Civic was worth more than his old car.
Good stuff man. Most people just let the corporations brainwash them into buying so much crap that’s not needed. We share a small minivan and we don’t drive all that much every year. It’s only 3 year old, but I’m planning to drive it for at least 10 more years.
That’s the smart thing to do. We are in our second decade of not having car payments, although these 13.5 year old cars won’t run forever. We’re thinking about going to 1 car once Mrs. Root of Good calls it quits.
Thought-provoking stuff here. Right now I agree that being a bit contrarian can really help you financially, as the general rules of thumb aren’t doing people any favors. But what happens when this stuff catches on and everyone is saving 50% of their income, and retiring in their thirties?
Just kidding. Good post.
I doubt it will ever happen. People love to thoughtlessly buy lots of crap and not save much money. I’m not too worried about them instituting all the suggestions in this post!
Good article! And of course it is difficult to disagree with any of what is in it – all makes good sense and some has been around for sometime. Then again, as one of my favorite writers said, if something is repeated it is likely to be very important.
I believe that the most important thing is to start thinking differently; the world has changed a lot and the only way to cope with the rate of change is to jump, not run fast.
It really bothers me when people talk about buying a house because “its a good investment”. A lot of people are still brainwashed to think that homes are magical money creating machines that will never lose value. They’re a place to live first and foremost. Any appreciation in value over the long term is just a bonus
I think it definitely makes sense to purchase a house in many cases. The “buy as much house as possible” mantra is so often repeated that it must be true! Not!
I really like your perspective on housing. Thinking of it as purely an investment seems dangerous.
I always thought it strange that people make the biggest purchase in their lives based on what the next person buying the property would think that their buyers would want. Particularly strange if you potentially plan on spending multiple decades in your new home.
My mom always tells me that she was told to “buy as much house as you can afford” back in the day. The thinking was that housing prices would always rise. But, they don’t. =/
I heard that a lot when we were looking at our first house/condo over 10 years ago. At the time we were on a limited budget (1 of us working entry level job and the other in school). We ended up spending $70k on a condo. It was exactly what we needed, and saved us a bunch of money on rent. And turned into a rental unit for a few years that made more money. Given the HOA, taxes, and insurance costs, it was also about all we could reasonably afford on our limited budget.
And because our housing choice led to low fixed costs each month, Mrs. Root of Good quit her unsatisfactory job and was able to go back to school too (and we still paid the mortgage). Our Luck Making Machine was working in overdrive back then!
Just wanted to say that this is a fabulous post. We’re looking forward to finding where we are meant to be and how to make our finances work for it.
Glad you enjoyed it. It’s a great time of year to reflect and find areas to make positive changes.
Great post! I am enjoying my sabbatical very much. I am now in my 8th month and can’t even imagine going back to the grind. I made my license in 2 states inactive and kept one active, just in case l need to go back one day. I have certainly made my mistakes along the way! Lots..but it’s never to late to learn.
Good to hear you are enjoying your sabbatical! Trying to make it permanent? Here’s a post I wrote on taking a long sabbatical and how to situate yourself to potentially return to work later if you want. It was written as a response to an inquiry from a reader (an attorney) who was considering trying early retirement but didn’t want to commit to permanently retiring.
Thanks for that. I read it, very helpful. I am hoping to make it permanent. It took me so long to just do it..thought about it a lot, but it took my sister’s death to make it happen. Life really is too short, despite all the careful planning etc..etc..now, on with my second chapter of life..
Keep up the good work !
Hey Root, great blog. Do you ever think about doing something a little more useful with your law degree? I know that there are tons in need. Or is making a quick ($32) buck better?
Thanks,
MD
Who knows what the future holds? Maybe I’ll get bored and hang out a shingle.
Making a quick buck, or even better 32 of them, is pretty awesome.
Great post! I totally agree about investments. Wall Street is in the business of convincing us we need to be “in motion” with our investments. Buying, selling, and moving to the next hot trend. In reality, the opposite is true. Save as much as you can, and invest in a diversified group of low cost index-funds and stick to your plan. I’ve found that I have better returns and a lot more free time. Win-win.
Thanks!
Michael
Absolutely. Billions are made on Wall Street by the traders and the banks shuffling the money around. But it’s all siphoned off the returns of the investors. Best to starve the traders and the banks and keep almost all the investment returns for ourselves, right? 🙂